Iberia posts record operating loss

Spanish carrier Iberia posted a record operating loss, hit by declining air travel and underscoring challenges facing the industry as the airline seeks shelter in a merger with British Airways.

Iberia said its loss before interest and taxes (EBIT) widened to €464 million in 2009, deeper than forecasts for €335 million, in what is likely to be its last full-year earnings as Spain's national flag carrier.

Roughly a third of Iberia's revenues come from its domestic market, further hit by low-cost carriers and the roll-out of high-speed rail, particularly on a key Madrid-Barcelona route.

The airline swung to a net loss of €273 million in 2009, with a €91 million loss in the fourth quarter alone.

The results follow recent mixed numbers from merger partner BA, which posted a surprise third-quarter operating profit, and rivals like Air France-KLM which unveiled heavier than expected losses and said more was to come.

BA and Iberia plan to seal a definitive agreement in the first quarter to create the world's third largest airline by revenue. BA shareholders will have 55% of the new company and Iberia shareholders 45%. (Reuters)

Related articles

Spanish airline Iberia is scheduled to relaunch its direct flights between Budapest and Madrid as of June, operating three flights a week and raising that to four as of July, Hungarian state owned tourism agency Magyar Turizmus said today, according to Hungarian news agency MTI.